Commerce With Indian Tribes

Article I, Section 8, Clause 3:

[The Congress shall have Power . . . ] To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes; . . .

Congress’s power to regulate commerce “with the Indian tribes,” once almost rendered superfluous by Court decision,1 has now been resurrected and made largely the basis for informing judicial judgment with respect to controversies concerning the rights and obligations of Native Americans. Although Congress in 1871 forbade the further making of treaties with Native American tribes,2 . cases disputing the application of the old treaties and especially their effects upon attempted state taxation and regulation of on-reservation activities continue to be a staple of the Court's docket.3 But this clause is one of the two bases now found sufficient to empower Federal Government authority over Native Americans. “The source of federal authority over Indian matters has been the subject of some confusion, but it is now generally recognized that the power derives from federal responsibility for regulating commerce with Indian tribes and for treaty making.” 4

Forsaking reliance upon other theories and rationales, the Court has established the preemption doctrine as the analytical framework within which to judge the permissibility of assertions of state jurisdiction over the Native Americans. However, the “semi-autonomous status” of Native tribes erects an “independent but related” barrier to the exercise of state authority over commercial activity on a reservation.5 Further, the Court has clarified that “States have no authority to reduce federal reservations lying within their borders.” 6 Thus, the question of preemption is not governed by the standards of preemption developed in other areas. “Instead, the traditional notions of tribal sovereignty, and the recognition and encouragement of this sovereignty in congressional Acts promoting tribal independence and economic development, inform the pre-emption analysis that governs this inquiry. . . . As a result, ambiguities in federal law should be construed generously, and federal pre-emption is not limited to those situations where Congress has explicitly announced an intention to pre-empt state activity.” 7 A corollary is that the preemption doctrine will not be applied strictly to prevent states from aiding Native Americans.8 However, the protective rule is inapplicable to state regulation of liquor transactions, because there has been no tradition of tribal sovereignty with respect to that subject.9

The scope of state taxing powers—the conflict of “the plenary power of the States over residents within their borders with the semi-autonomous status of Indians living on tribal reservations” 10 —has been often litigated. Absent cession of jurisdiction or other congressional consent, states possess no power to tax Indian reservation lands or Indian income from activities carried on within the boundaries of the reservation.11 Off-reservation Indian activities require an express federal exemption to deny state taxing power.12 Subjection to taxation of non-Indians doing business with Indians on the reservation involves a close analysis of the federal statutory framework, although the operating premise was for many years to deny state power because of its burdens upon the development of tribal self-sufficiency as promoted through federal law and its interference with the tribes' ability to exercise their sovereign functions.13

That operating premise, however, seems to have been eroded. For example, in Cotton Petroleum Corp. v. New Mexico,14 the Court held that, despite of the existence of multiple taxation occasioned by a state oil and gas severance tax applied to on-reservation operations by non-Indians, which was already taxed by the tribe,15 the impairment of tribal sovereignty was “too indirect and too insubstantial” to warrant a finding of preemption. The fact that the state provided significant services to the oil and gas lessees justified state taxation and also distinguished earlier cases in which the state had “asserted no legitimate regulatory interest that might justify the tax.” 16 Still further erosion, or relaxation, of the principle of construction may be found in a later case, in which the Court, confronted with arguments that the imposition of particular state taxes on Indian property on the reservation was inconsistent with self-determination and self-governance, denominated these as “policy” arguments properly presented to Congress rather than the Court.17

The impact on tribal sovereignty is also a prime determinant of relative state and tribal regulatory authority.18

Since Worcester v. Georgia,19 the Court has recognized that Indian tribes are unique aggregations possessing attributes of sovereignty over both their members and their territory.20 They are, of course, no longer possessed of the full attributes of sovereignty,21 having relinquished some part of it by their incorporation within the territory of the United States and their acceptance of its protection. By specific treaty provision, they yielded up other sovereign powers, and Congress has removed still others. “The sovereignty that the Indian tribes retain is of a unique and limited character. It exists only at the sufferance of Congress and is subject to complete defeasance.” 22

In a case of major import for the settlement of Indian land claims, the Court ruled in County of Oneida v. Oneida Indian Nation,23 that an Indian tribe may obtain damages for wrongful possession of land conveyed in 1795 without the federal approval required by the Nonintercourse Act.24 The Act reflected the accepted principle that extinguishment of the title to land by Native Americans required the consent of the United States and left intact a tribe's common-law remedies to protect possessory rights. The Court reiterated the accepted rule that enactments are construed liberally in favor of Native Americans and that Congress may abrogate Indian treaty rights or extinguish aboriginal land title only if it does so clearly and unambiguously. Consequently, federal approval of land-conveyance treaties containing references to earlier conveyances that had violated the Nonintercourse Act did not constitute ratification of the invalid conveyances.25 Similarly, the Court refused to apply the general rule for borrowing a state statute of limitations for the federal common-law action, and it rejected the dissent's view that, given “the extraordinary passage of time,” the doctrine of laches should have been applied to bar the claim.26

Although the power of Congress over Indian affairs is broad, it is not limitless.27 The Court has promulgated a standard of review that defers to the legislative judgment “[a]s long as the special treatment can be tied rationally to the fulfillment of Congress’s unique obligation toward the Indians.” 28 A more searching review is warranted when it is alleged that the Federal Government's behavior toward Native Americans has been in contravention of its obligation and that it has in fact taken property from a tribe which it had heretofore guaranteed to the tribe, without either compensating the tribe or otherwise giving members the full value of the land.29

Footnotes

1

United States v. Kagama, 118 U.S. 375 (1886). Rejecting the Commerce Clause as a basis for congressional enactment of a system of criminal laws for Native Americans living on reservations, the Court nevertheless sustained the act on the ground that the Federal Government had the obligation and thus the power to protect a weak and dependent people. Cf. United States v. Holiday, 70 U.S. (3 Wall.) 407 (1866); United States v. Sandoval, 231 U.S. 28 (1913). This special fiduciary responsibility can also be created by statute. E.g., United States v. Mitchell, 463 U.S. 206 (1983).

2

16 Stat. 544, 566, 25 U.S.C. § 71.

3

E.g., Puyallup Tribe v. Washington Game Dep't, 433 U.S. 165 (1977); Washington v. Washington State Commercial Passenger Fishing Vessel Ass'n, 443 U.S. 658 (1979); Montana v. United States, 450 U.S. 544 (1981).

4

McClanahan v. Arizona Tax Comm'n, 411 U.S. 164, 172 n.7 (1973). See also Morton v. Mancari, 417 U.S. 535, 551–553 (1974); United States v. Mazurie, 419 U.S. 544, 553–56 (1974); Bryan v. Itasca County, 426 U.S. 373, 376 n.2 (1976); White Mountain Apache Tribe v. Bracker, 448 U.S. 136, 142 (1980); Ramah Navajo School Bd. v. Bureau of Revenue of New Mexico, 458 U.S. 832, 837 (1982); United States v. Lara, 541 U.S. 193, 200 (2004).

5

White Mountain Apache Tribe v. Bracker, 448 U.S. 136, 142–143 (1980); Ramah Navajo School Board v. Bureau of Revenue of New Mexico, 458 U.S. 832, 837–838 (1982). “The two barriers are independent because either, standing alone, can be a sufficient basis for holding state law inapplicable to activity undertaken on the reservation or by tribal members.” Id. at 837 (quoting White Mountain, 448 U.S. at 143).

6

McGirt v. Oklahoma, 140 S. Ct. 2452, 2462 (2020) (emphasis added).

7

Ramah Navajo School Board v. Bureau of Revenue of New Mexico, 458 U.S. 832, 838 (1982). See also New Mexico v. Mescalero Apache Tribe, 462 U.S. 324 (1983).

8

Three Affiliated Tribes v. Wold Engineering, 467 U.S. 138 (1984) (upholding state-court jurisdiction to hear claims of Native Americans against non-Indians involving transactions that occurred in Indian country). However, attempts by states to retrocede jurisdiction favorable to Native Americans may be held to be preempted. Three Affiliated Tribes v. Wold Engineering, 476 U.S. 877 (1986).

9

Rice v. Rehner, 463 U.S. 713 (1983).

10

McClanahan v. Arizona Tax Comm'n, 411 U.S. 164, 165 (1973).

11

Mescalero Apache Tribe v. Jones, 411 U.S. 145, 148 (1973); McClanahan v. Arizona Tax Comm'n, 411 U.S. 164 (1973); Moe v. Confederated Salish & Kootenai Tribes, 425 U.S. 463 (1976); Bryan v. Itasca County, 426 U.S. 373 (1976); Washington v. Confederated Colville Tribes, 447 U.S. 134 (1980); Montana v. Blackfeet Tribe, 471 U.S. 759 (1985). See also Oklahoma Tax Comm'n v. Citizen Band Potawatomi Indian Tribe, 498 U.S. 505 (1991). A discernable easing of the reluctance to find congressional cession is reflected in more recent cases. See County of Yakima v. Confederated Tribes & Bands of the Yakima Indian Nation, 502 U.S. 251 (1992).

12

Mescalero Apache Tribe v. Jones, 411 U.S. 145, 148–149 (1973).

13

White Mountain Apache Tribe v. Bracker, 448 U.S. 136 (1980); Central Machinery Co. v. Arizona State Tax Comm'n, 448 U.S. 160 (1980); Ramah Navajo School Board v. Bureau of Revenue of New Mexico, 458 U.S. 832 (1982).

14

490 U.S. 163 (1989).

15

Held permissible in Merrion v. Jicarilla Apache Tribe, 455 U.S. 130 (1982).

16

490 U.S. at 185 (distinguishing Bracker and Ramah Navaho School Bd).

17

County of Yakima v. Confederated Tribes & Bands of the Yakima Indian Nation, 502 U.S. 251, 265 (1992). To be sure, this response was in the context of the reading of statutory texts and giving effect to them, but the unqualified designation is suggestive. For recent tax controversies, see Oklahoma Tax Comm'n v. Sac & Fox Nation, 508 U.S. 114 (1993); Department of Taxation & Finance v. Milhelm Attea & Bros., 512 U.S. 61 (1994); Oklahoma Tax Comm'n v. Chickasaw Nation, 515 U.S. 450 (1995).

18

E.g., New Mexico v. Mescalero Apache Tribe, 462 U.S. 324 (1983).

19

31 U.S. (6 Pet.) 515 (1832). See also Cherokee Nation v. Georgia, 30 U.S. (5 Pet.) 1 (1831). Under this doctrine, tribes possess sovereign immunity from suit in the same way that the United States and the states do. Santa Clara Pueblo v. Martinez, 436 U.S. 49, 58 (1978); United States v. United States Fidelity & Guaranty Co., 309 U.S. 506, 512–13 (1940). The Court has repeatedly rejected arguments to abolish tribal sovereign immunity or at least to curtail it. Oklahoma Tax Comm'n v. Citizen Band Potawatomi Indian Tribe, 498 U.S. 505, 510 (1991).

20

United States v. Wheeler, 435 U.S. 313 (1978) (inherent sovereign power to punish tribal offenders). Compare California v. Cabazon Band of Mission Indians, 480 U.S. 202 (1987) (state regulation of on-reservation bingo is preempted as basically civil/regulatory rather than criminal/prohibitory), with Brendale v. Confederated Tribes & Bands of the Yakima Indian Nation, 492 U.S. 408 (1989) (extensive ownership of land within “open areas” of reservation by non-members of tribe precludes application of tribal zoning within such areas). See also Hagen v. Utah, 510 U.S. 399 (1994). Among the fundamental attributes of sovereignty which a tribe possesses unless divested of it by federal law is the power to tax non-Indians entering the reservation to engage in economic activities. Washington v. Confederated Colville Tribes, 447 U.S. 134 (1980); Merrion v. Jicarilla Apache Tribe, 455 U.S. 130 (1982).

21

United States v. Kagama, 118 U.S. 375, 381 (1886); United States v. Wheeler, 435 U.S. 313, 323 (1978).

22

United States v. Wheeler, 435 U.S. 313, 323 (1978). See South Dakota v. Bourland, 508 U.S. 679 (1993) (abrogation of Indian treaty rights and reduction of sovereignty). Congress may also remove restrictions on tribal sovereignty. The Court has held that, absent authority from federal statute or treaty, tribes possess no criminal authority over non-Indians. Oliphant v. Suquamish Indian Tribe, 435 U.S. 191 (1978). The Court also held, in Duro v. Reina, 495 U.S. 676 (1990), that a tribe has no criminal jurisdiction over members of other tribes who commit crimes on the reservation; jurisdiction over members rests on consent of the self-governed, and absence of consent defeats jurisdiction. Congress, however, quickly enacted a statute recognizing inherent authority of tribal governments to exercise criminal jurisdiction over non-member Indians, and the Court upheld congressional authority to do so in United States v. Lara, 541 U.S. 193 (2004).

23

470 U.S. 226 (1985).

24

1 Stat. 379 (1793).

25

470 U.S. at 246–48.

26

470 U.S. at 255, 257 (Justice Stevens).

27

“The power of Congress over Indian affairs may be of a plenary nature; but it is not absolute.” United States v. Alcea Bank of Tillamooks, 329 U.S. 40, 54 (1946) (plurality opinion) (quoted with approval in Delaware Tribal Business Comm. v. Weeks, 430 U.S. 73, 84 (1977)).

28

Morton v. Mancari, 417 U.S. 535, 555 (1974). The Court applied the standard to uphold a statutory classification that favored the employment of “qualified Indians” at the Bureau of Indian Affairs. In Delaware Tribal Business Comm. v. Weeks, 430 U.S. 73 (1977), the same standard was used to sustain a classification that favored, although inadvertently, one tribe over other Native Americans. While Indian tribes are unconstrained by federal or state constitutional provisions, Congress has legislated a “bill of rights” statute covering them. See Santa Clara Pueblo v. Martinez, 436 U.S. 49 (1978).

29

United States v. Sioux Nation, 448 U.S. 371 (1980). See also Solem v. Bartlett, 465 U.S. 463, 472 (1984) (there must be “substantial and compelling evidence of congressional intention to diminish Indian lands” before the Court will hold that a statute removed land from a reservation); Nebraska v. Parker, 577 U.S. ___, No. 14-1406, slip op. at 5–6 (2016) (noting that “only Congress can divest a reservation of its land and diminish its boundaries,” but finding that the statute in question did not clearly indicate Congress's intent to effect such a diminishment of the Omaha reservation); McGirt v. Oklahoma, 140 S. Ct. 2452, 2463 (2020) (stating that to disestablish a reservation, Congress must “clearly express its intent to do so” ). In McGirt, the Court held that Congress had not expressed a sufficiently clear intent to disestablish the Creek Reservation, concluding that the reservation survived allotment and other intrusions “on the Creek's promised right to self-governance.” Id. at 2464.